Supreme Court is requested to ban amnesty scheme
Government imposes Income Tax Act 2016 (06-12-2016)
The Federal government has imposed the Income Tax (Amendment) Act 2016 across the country. Parliament approved tax amnesty scheme for real estate sector on 30th of November 2016. This is open ended amnesty scheme, without time limit. According to this scheme non-filers or people with black money will be able to become filer after paying 3% tax.
Motives of government to give property tax amnesty scheme
The government has the following motives to offer amnesty scheme for real estate sector. Firstly, government wants to bring shadow economy to regular economy. Pakistani shadow economy is 20% of the real economy. Secondly, government wants to bring more people to tax net. Thirdly, government wants to cool down realtors who were protesting down to record low property transactions. Fourthly, government wants to boost the construction sector that was hit hard due to new taxes.
Letter of Transparency International Pakistan to Supreme Court to ban real estate tax amnesty scheme (05-12-2016)
Transparency International Pakistan has written letter to the Supreme Court of Pakistan to ban tax amnesty scheme for real estate sector. Transparency International Pakistan has also requested to ban all future amnesty schemes. Here are the major objections of Transparency International Pakistan:
Property tax Amnesty scheme will destroy the tax system in Pakistan:
Pakistan is moving in the right direction to establish proper tax collection system. This amnesty scheme will eradicate the tax system in Pakistan.
Property tax Amnesty scheme will promote more corruption:
Amnesty scheme will encourage the people to earn money through illegal means as they know that they can get their assets clean by paying just 3% tax.
Tax payers will be discouraged due to property tax amnesty scheme:
Honest tax payers who pay up to 35% taxes on their income will be discouraged due to this tax amnesty scheme.